Credit Guarantees: Challenging Their Role in Improving Access to Finance in the Pacific Region
Asian Development Bank | November 2016
Abstract
The Pacific Private Sector Development Initiative—a regional technical assistance facility cofinanced by the Asian Development Bank (ADB), the Government of Australia, and the Government of New Zealand—has undertaken landmark secured transaction reforms in eight Pacific Island countries. These reforms have unlocked the value in “movable” assets such as machinery, inventory, and accounts receivable for use as collateral in borrowing. They have the potential to benefit businesses and financial institutions that offer business loans.
Yet, despite these reforms, financial institutions remain unwilling to lend. Businesses still find it hard to access the credit they need to grow, which in turn creates jobs and drives the economic activity so desperately needed in the Pacific. Credit guarantees are often proposed as an instrument to overcome this problem. However, as this publication demonstrates, there is no strong theoretical justification for their use.
Citation
Asian Development Bank. 2016. Credit Guarantees: Challenging Their Role in Improving Access to Finance in the Pacific Region. © Asian Development Bank. http://hdl.handle.net/11540/6804.PDF ISBN
978-92-9257-571-7
ISSN
978-92-9257-572-4
Keywords
ADB
Self Financing
Aid Financing
Financial Aid
Development Banks
Project Impact
Export Credit Financing
Industrialization
Industrial Economics
Industrial Development
Industrial Policy
Cofinancing
Development Financing
Economic Development and Finance
Finance
Financial Advisory Services
Financial Assistance
Financial Support
Credit Policy
Credit Cooperatives
Industrial Credit
Commercial credit
Commerce and Industry
Intra-Industry Trade
Large Scale Industry
Labor
Development Banks
Asset allocation
Investment management
Commercial documents
Credit control
Credit allocation
Capital market
Developing countries
Market share
Labor
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